Tuesday, January 19, 2016

Is 2016 the Year of the Dollar Collapse?

By Simon Black

"The entire American political system is a con, a sleazy mix of
legalized bribes, auctioning off of favors, revolving doors between
government agencies and the corporations they enrich and the blatant
hypocrisy of snake-oil salespeople who know the marks (voters) face a
false choice between two parties that are the same poison sold under
different labels."

On
September 4, 1993, President Bill Clinton spoke about the American Dream in a
weekly radio address….

He
told his audience that “in America, the idea is that if you work hard and play
by the rules, you’ll be rewarded with a good life for yourself and a better
chance for your children.”

That’s
what America used to stand for, and indeed much of the Western world. Freedom. Truth. Hard work and fair play.
Building a better life.

But
those ideals have all but faded now, displaced by a new normal of war, debt,
government surveillance, freedom-killing bureaucracy, and a monetary policy
that decimates responsible, hard-working people for the benefit of a tiny
elite.

In
his end-of-year commentary in the Washington Post, writer George Will summed up
2015 citing example after example of government overreach and excess--

The value
of property seized by the US federal government through Civil Asset
Forfeiture exceeded the value of property stolen by burglars and thieves

Florida
police raided a Mahjong game played by four women aged 87 through 95
because they were *gasp* betting with their own money

New Jersey
police arrested a 72-year old retired schoolteacher for illegally carrying
a firearm-- a 300-year old flintlock pistol he had purchased from an
antique dealer

A 9-year
old in Florida was threatened with sexual harassment charges for writing
love notes to a girl saying that her eyes sparkled like diamonds

George
Will’s list, of course, barely scratched the surface of the tip of the iceberg

2015
was the year that the middle class was officially vanquished in the Land of the
Free, with its share of the population falling to just 50%.

US
federal debt reached nearly $19 trillion in 2015, an increase of almost $750
billion during the calendar year.

The
US government published over 80,000 pages of new regulations, making it nearly
impossible to understand ‘the rules’, let alone play by them.

But with each successive law and
regulation, they tighten their stranglehold on the financial system, to the
point that even the most innocuous activity is considered grounds for
suspicion.

As a result of these ridiculous AML [anti-money laundering bills] laws, walking
around with too much cash is now considered an indication of criminal activity.

And thanks to the Civil Asset Forfeiture rules in the Land of the Free, police
have the authority to confiscate your cash.

There’s no trial. No jury. They simply steal your money.

Believe it or not, the AML rules also apply to coin and jewelry dealers. So
buying too much gold is now an indication of money laundering.

Having too many transactions in your bank account is considered ‘suspicious
activity’.

(Of course, if you have too little financial activity, your bank account can be
considered ‘dormant’ and turned over to the state.)

Even going to the bank to withdraw your own money is now considered suspicious.
It’s madness.

The latest craze for the anti-money laundering crusaders is going after people
who buy luxury real estate without a mortgage.

Last week the US Treasury Department issued new ‘rules’ demanding substantial
scrutiny over real estate transactions involving more than $3 million in New
York City, and $1 million in Miami.

Property buyers will now have to jump through all sorts of bureaucratic hoops
to prove that they aren’t criminals or financing terrorists.

Plus anyone who buys real estate through trusts and corporate entities must now
publish the details of the ultimate beneficiary.

This is bad news for George Clooney who owns property through his “George
Guilfoyle Trust”.

And Leonardo Di Caprio. And nearly every other celebrity out there, who, for
obvious privacy reasons, don’t attach their names to the properties they buy.

(Barack Obama has done the same thing, as neither he nor Michelle is listed as
the official property owner at the couple’s multi-million dollar mansion in
Chicago.)

It’s quite sad that seeking a little bit of privacy to be left alone in your
own home is now considered possible grounds for criminal activity. But it
really fits the trend.

Every month, every week, often every
day, there’s something else. There’s a new rule. A new restriction.

It’s strange that the government
is willing to make life more difficult for 99.99% of the population because of
the actions of a handful of people who might be criminals.

2015
also saw the passing of incomprehensibly terrible laws, including the USA
Freedom Act, which restored many of the worst parts of the PATRIOT Act that
were set to expire.

Then
there was the Cybersecurity Information Sharing Act, passed at the end of the
year, which officially turns the Land of the Free into a gigantic information-sharing
surveillance state.

And
of course the 2015 spending bill, which as of 3 days ago, allows the US
government to strip you of your passport if they believe in their sole
discretion that you owe them money.

These
are hardly the actions of a solvent, trustworthy government, or a nation that’s
on the right track.

It
doesn’t take a rocket scientist to figure out that this story doesn’t have a
happy ending.

We
can pretend that this time is different, that this country is different, that
there is some special sauce that allows this government to run massive
imbalances forever.

But
deep down we all know the truth... and where this is headed.

I’ve
read no shortage of apocalyptic predictions suggesting that 2016 is the year of
the dollar collapse. Or the global economic collapse.

Or
something else that invariably ends in the word ‘collapse.’

I
don’t believe that. First, no one can credibly answer the question “when?”

“We’ve seen a dramatic slowdown in consumer
spending… When sales actually fall from November to December during the holiday
season, you are in recession.”

Governments
have surprised us all with their uncanny ability to kick the can down the road
and delay the repercussions of their folly.

But
I don’t really think the question of ‘when’ is relevant.

Nearly
every major western government is insolvent. Entire monetary and financial
systems are insolvent.

Governments
have destroyed their own middle classes, giving rise to the greatest wealth gap
that has existed since the Great Depression.

The
risks are obvious. And you either stick your head in the sand and ignore them,
or you take steps to reduce their impact on your life.

It’s
like anything else -- if you live in a wildfire zone, you get fire insurance.
And you’ll never be worse off for having good coverage on your home to protect
your family.

Having
a Plan B just makes sense, regardless of whether a major disaster occurs in
2016, next year, or never.

We
can’t see the future, we can only see the risks today. Develop a Plan B that
addresses those risks, and you’ll never have to worry about the future again

NOTE:Long time readers have witnessed my similar
thoughts and predictions for several years now and perhaps the time has finally
arrived to truly button down your hatches…

I think the results are even worse than
portrayed in the results presented by the Census Bureau. Retail sales grew by
only 2.2% in 2015 versus 2014. That is significantly less than the real
inflation being experienced by real people, so on an inflation adjusted basis
they fell. Even the 2.2% increase is artificially pumped up by the Fed induced
auto debt fueled boom in car sales (or long-term rentals in reality). The 7
year 0% auto loans, subprime auto loans to deadbeats, and record levels of auto
leases have created fake demand that will end in tears when the defaults
skyrocket. If you remove these fake sales, then total retail sales are up a
pitiful 0.9% over 2014.

When you realize that two of the few strong
sales categories were autos (7.5%) and furniture stores (5.8%), you can put
your thinking cap on and realize the 7 year 0% financing scam is solely
responsible for these sales. Reducing credit score criteria and extending loan
terms always works. Right? The other relatively strong area was internet sales
(6.3%). Amazon and the rest of the on-line retail segment continues to destroy
the bricks and mortar retailers, but even these sales are slowing. They were up
a weak 0.3% from November. Before the states started taxing internet sales and
it was still a newer concept, the annual growth rates were 15% to 20%, so the
6.3% growth rate is rather unimpressive.

Wednesday, January 13, 2016

The Free State Project: Escape to Liberty

"If you want a Big
Brother,
you get all that comes with it."
-- Erich Fromm
(1900-1980)
Source: Escape from Freedom

I’ve written about this project off and on for over a
dozen years now and they are making progress.As America becomes more and more restrictive and as the un-Patriot Act
and life-long political leaches chip away at our Bill of Rights, this movement
is looking better and better…here’s an update:

The FSP
is, according to its website, “an effort to recruit 20,000 liberty-loving
people to move to New Hampshire.”

Hatched in 2001, the FSP wants 20,000 libertarians to quit their jobs, sell
their homes (if they own a home, that is) and relocate to the Granite State.

Let’s
take a look at why this project shows promise.

First and foremost, the FSP makes a pretty convincing case for moving to the
state. We can’t imagine anyone would think, on paper at least, that New
Hampshire would be a bad place to live. Libertarian or not.

In a FINRA Investor Education Foundation Financial Capability Survey, conducted
nationwide, the Granite State scored first in the nation in areas of financial
knowledge and decision making -- AKA “financial literacy.”

Imagine that…

A state filled with people who understand economics not just theoretically, but
how it applies to everyday life. That’s an interesting experiment in itself.

TWO: “New Hampshire is the 5th healthiest state in the nation.”

New Hampshirites, despite its “high prevalence for binge drinking,” according
to Health.com, “are more active than most Americans, enjoy a low rate of
infectious diseases, and have a low infant mortality rate.”

THREE:
Moreover, the FSP
website reads, “With the lowest homicide rate in the country, New Hampshire
consistently ranks as the safest state.

Not one
of the safest… the safest.

It also boasts the largest homeschooling networks… strong self-defense laws…
the highest number of Bitcoin transactions in the U.S. per capita (meaning, an
openness to dollar alternatives)… the highest median income… and the lowest
poverty rate in the U.S.

You
can check out all 101 reasons at the Free State Project’s website here.

From the
looks of it, as mentioned, the FSP is working.

Upon writing, 18,643 Americans have pledged to move to the state within the
next five years -- amounting to 93% of their goal of 20,000.

As you know,
we’re always on the lookout for ways to live free in an unfree world.

If you don’t like the idea of leaving the country in search of those greener
pastures, New Hampshire could be a great option within the borders

RELATED:The
Case for a Convention of States…Sign the petition & get involved in helping
to get Washington off our collective backs…

J.P. Morgan
Chase has turned its back on the stock market: For the first time in seven
years, the investment bank is urging
investors to sell stocks on any bounce.

“Our view is
that the risk-reward for equities has worsened materially. In contrast to the
past seven years, when we advocated using the dips as buying opportunities, we
believe the regime has transitioned to one of selling any rally,” Mislav
Matejka, an equity strategist at J.P. Morgan, said in a report.

Aside from
technical indicators, expectations of anemic corporate earnings combined with
the downward trajectory in U.S. manufacturing activity and a continued weakness
in commodities are raising red flags.

Major banks
have not talked like this since the great financial crisis of 2008/2009

Wednesday, January 6, 2016

Political language is designed to make lies sound truthful and murder
respectable, and to give an appearance of solidity to pure wind.>George Orwell

The economic
misery of the middle class and the
resentment our government has fostered among the electorate for its overbearing
and crushing anti-freedom policies has fueled the rise of Trump and
anti-establishment feelings in this country.

Many Americans are fed up
with government.

New data from Wells Fargo indicates that
something is spooking a sector of the U.S. population, for example, — the nation's seniors —
in a serious way.

On its Investor and Retirement Optimism
Index, which tracks investor sentiment, retiree optimism dropped 23 points in a
single quarter.

"It was a very big drop, and the first
time in over a year that retirees were less optimistic than non-retirees,"
says Zar Toolan, director of advice quality for Wells Fargo Advisors.

COSTS RISE, INVESTMENTS FLAT

With the cash in their bank accounts earning
virtually nothing, and the stock market essentially flat for the year, retirees
have not been seeing any portfolio improvements. Inflation, a notorious
portfolio-killer, looms whenever an economy is heating up.

Meanwhile, living expenses are lofty.
Healthcare costs in retirement for a 65-year-old couple now stand at an
estimated $245,000, according to Fidelity Benefits Consulting.

What really drives the point home for
retirees is that they have a shorter investment horizon than those still in the
prime of their careers. An investor at age 70 or 75 cares very much about
shorter-term portfolio gains.

As a result, financial planners report having
do an increasing amount of hand-holding with their senior clients.

"They worry about ISIS, rising interest
rates, income disparity, European recession, dysfunctional Congress, slowdown
in China, and falling commodity prices," says Austin Frye, a financial
planner in Aventura, Florida. "There is, in fact, a lot for them to worry
about.

Over the past
half century, our two-party system has managed to create a nightmare of red
tape and regulation at the federal and state level which has strangled our
growth and freedom while feathering their respective nests.

The “G” in government now represents GREED and GOUGE the
citizen.Even our courts have become
another taxing authority with ludicrously high fines and costs.Unelected officials via hundreds of agencies
now rule our nation and levy fines created out of thin air without benefit of
legislation creating a nationwide pit which has sucked the lifeblood out of our
once famous middle class job creation machine.

The average
American has been dummied down or has lost faith in our system while our middle
class has been decimated as a result of too much government….

Case in Point:A Texas 7th grader was ordered to
cover up his Star Wars T-Shirt because it violated the school’s ban on symbols
oriented towards violence.Colton
Southern was told to zip up his sweatshirt to conceal the image of a Storm
Trooper holding a blaster.

We’ve witnessed incidents in CA where children were told
they could not wear an American flag on their shirt as it “might offend”
others.

If things don’t change soon, there won’t be much left to
govern.The United States has become a
parody of George Orwell’s book 1984. This became especially true
after 911 when suddenly all citizens lost their privacy and saw many of their
freedoms and Bill of Rights diminished due to the results of a hastily and
poorly conceived set of laws poorly named the “Patriot Act.”

Our nation’s greatness did not erode overnight but it
sure seems the quality of our leadership [from either party] has.

Personally, I put much of the blame for our demise on
career politicians.George Washington
warned against this in his farewell speech but that seems have been forgotten
by the political elite who have figured out just how profitable it is to
continually feed at the public trough, often collecting multiple public
pensions and gold plated perks [Congress, for example, gets an automatic pay
raise but usually forgets about our military or Social Security recipients].

Some Solutions

1.TERM
LIMITS-This is a must.Our Founders
served without pay, only expenses.I
suggest current elected leaders get paid a salary and perks for 20 years and
that’s it.If they feel inclined to
‘serve’ further, they can do so for expenses only or perhaps at the same rate
Social Security recipients get AND if they need it, they should get Medicare at
the same scale as well.This should
apply across the board – no job hopping or switching states [as the Clinton’s
did so she could get a New York Senators job] to get extra pensions as is so
often the case in politics.

2.OVERHAUL
OUR TAX SYSTEM – Our system is antiquated, outdated and overly
complex.A flat tax system is in order
in which everyone pays a percentage including foreign corporations doing
business here.The US has a high
corporate tax which is why so many incorporate elsewhere.Many low income people receive refunds
despite never paying into the system.Since the United States has become an expensive nation in which to live,
a better system might be to completely eliminate ALL taxes for low income
people on the first $25,000 of income.That would give them an immediate boost income without hurting small
businesses.

3.START
ELIMINATING government agencies and red tape which hamper job creation or
duplicate each other.For instance, we
do not need 51 Department’s of Education, we do not need the BATF, etc.If an agency doesn’t help to boost new jobs, cut
costs or help citizens or industry become more productive – GET RID OF IT!

4.WELFARE-If
you’re not here legally, you’re not entitled to food stamps, Section 8 housing,
free schooling, free medical care, etc. – Period!If you continually have illegitimate
children, don’t expect the government/taxpayers to pay for them.One is a mistake but three or more is a way
of life.

5.If you
have a felony conviction, [EX: the late Marion Barry, former Mayor of
Washington, DC] you should not be allowed to run for office…if cannot legally
own a gun, you shouldn’t be in office.

Many of my
colleagues in the financial sector are saying this is the lull before the final
storm and frankly, I often agree.The
wizards in Washington always manage to pull another rabbit from the hat despite
rapidly mounting debt and inflation.

The world is already at peak debt yet…

Politicians
continually seek new ways to fleece the public of their money and their rights
so I too feel it is only a matter of time before the casino collapses.

Personally, I believe some kind of collapse will have to
take place before a new system replaces it…that would be how history normally
operates and your best bet is to cover your bets as best you can.Hope for the best and plan for the worst.